Bond company taking over finances at NEISD construction sites

By Lindsay Kastner :
July 24, 2012
: Updated: July 24, 2012 10:59pm

Two new North East Independent School District Elementary schools, Las Lomas Elementary and Vineyard Ranch Elementary (not shown), will not open as planned in August.

A bonding company has taken over financial control of the Las Lomas and Vineyard Ranch elementary school construction projects from general contractor Summit Builders and the completion date of both schools is in jeopardy — again.

Construction at both schools has been plagued with problems. Work began in January 2011 and began slipping behind schedule by October, shortly before the first subcontractor walked off the job.

As summer began, the schools were 120 and 130 days off target.

NEISD spokeswoman Aubrey Chancellor said she didn't know how many subcontractors have left the two projects but said “the subs have been down significantly at both sites.” At least six had walked off the job by the end of May.

The district had originally scheduled the schools to be completed last week, then set new completion dates of Oct. 25 for Las Lomas and Nov. 1 for Vineyard Ranch.

Chancellor said the district will wait for an audit from bonding company Safeco to determine whether new dates must be set. This latest setback will not alter a previous plan for students slated to attend the two schools to go to alternate campuses, she said.

Doug McMurry, the executive vice president of the San Antonio chapter of the Associated General Contractors, who chaired the NEISD citizens' bond oversight committee from 2003 to 2005, said the district typically does a very good job managing its bond programs. But he called the current situation “a high-profile disaster.” “Almost immediately we started hearing about problems at the construction site,” McMurry said.

Initially, both Summit and school district officials said the problem was primarily caused by the subcontractors.

Safeco told the district Monday it was stepping in and provided information about the scope of Summit's financial woes, Chancellor said.

“From now on, NEISD will pay Safeco and the bonding company will make sure that the subs are paid on time,” she said.

Summit President Jeffery Stone did not return a call requesting comment. The Phoenix-based firm agreed to build the two schools for a total of $54 million, nearly $3 million less than Skanska USA, the next lowest builder.

The district does not automatically hire the lowest bidder but ranks contractors according to several factors, with price accounting for 40 percent of the score.

Gottardy has said that Summit came with sterling references but McMurry said the company does not have the best reputation and said the district should do more to vet prospective contractors and to consider “value, not just the lowest price.”

Because of the problems on these projects, any future general contractors must have a home office that has been in operation for at least two years and that is within 100 miles of the district's headquarters, Chancellor said. Also, the district is increasing its penalty for late completion of construction projects from $2,500 per school, per day to $7,500 per day.